Determinants of Effective Budget Utilization in Ethiopian Public Institutions

doi:10.7176/rjfa/12-17-02

Abstract

According to many scholars finding Budget utilization is affected with intrinsic and extrinsic factors within the boundary of in and outside of the organization having the influence on the proper utilization of the budget. The major objective of this study is to determine the major factors that affect effective budget utilization in Ethiopian public institutions, which is both institutional intrinsic and outside of the institution external factors. To achieve this objective a systematic review of meta-analysis method was used. The the major findings of the review shows that lack of effective monitoring and evaluation, structural problems, employees competency and centralized budget allocation have a significant critical factors which is found in all institutions as a negative determinant factor of in effective budget utilization in Ethiopian public institutions. Based on the findings the researcher recommends that every public institution should give attention regarding with the listed out factors before approval of annual budgets in order to effectively utilize the approved budgets. Keywords : Utilization, Budget, Approval, Centralized, Competency DOI: 10.7176/RJFA/12-17-02 Publication date: September 30 th 2021

Highlights

IntroductionMost governmental policies that have the potential to make a difference to people’s lives cannot to do so without a budget, so that a difficult aggregate expenditure control is highly required to assure an efficient use of resources in accordance with the government priorities(Allen & Tommasi 2001)
Background of the StudyEffective and efficient budget utilization is determinant of socio-economic development of any given country including Ethiopia
Several reviews of Public Financial Management performance in developing countries show that countries score significantly better on budget preparation than on budget utilizing

Summary

Introduction

Most governmental policies that have the potential to make a difference to people’s lives cannot to do so without a budget, so that a difficult aggregate expenditure control is highly required to assure an efficient use of resources in accordance with the government priorities(Allen & Tommasi 2001). The public budget planning is a process by which government sets the level of expenditure, collects revenues and allocates the spending of resources among all sectors to meet national goals (Shah, 2008). Not all allocated budgets are used as per the proposed plan These could be cases where the approved funds may not be enough to fully accomplish the intended goal. The disparities between the budget allocated and actual expenditure arise due to multiplicity of factors and improper costing of county functions (Rotich & Ngahu, 2015). The budget cycle needs to be tracked and at every stage the factors that could be affecting the utilization of the budget analyzed

Methods

Findings

Conclusion